Answer:
28%
Explanation:
Given that,
Selling price = $ 200 per unit
Current sales = 30,300 units
Break-even sales = 21,816 units
Current sales in dollars:
= Current sales × Selling price
= 30,300 units × $200 per unit
= $6,060,000
Break even sales in dollars:
= Break-even sales × Selling price
= 21,816 units × $200 per unit
= $4,363,200
Margin of Safety as a percentage of sales:
= (Current sales in dollars - Break even sales in dollars) ÷ Current sales in dollars
= ($6,060,000 - $4,363,200) ÷ $6,060,000
= $1,696,800 ÷ $6,060,000
= 0.28 or 28%
